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Resolution
number KT/2023/159
MOVED by Member A Tyler, seconded by Member P Gillon:
That
the Kaipātiki Local Board:
a)
completely reject the proposal to
address local board funding inequity in its entirety (including all options
presented) for the following reasons:
i)
The proposed funding model does not
include as factors (i) rates revenue from each local board area, nor (ii)
revenue from local activities generated from each local board area. These
factors are both required be given regard to in the Local Board funding
policy as outlined in the Local Government (Auckland Council) Act 2009
section 19 (4) (c), and therefore the proposed funding model may be illegal:
19 Local boards funding policy
(4) The formula referred to in
subsection (2)(a) must
allocate funds between the local boards in a way that provides an equitable
capacity for the local boards to enhance the well-being of the communities in
each of their local board areas, having regard to the following factors:
(a) the level of dependence on local government
services and facilities in each local board area (as informed by the
socio-economic, population, age profile, and other demographic
characteristics of each local board area); and
(b) the costs of achieving and maintaining the
identified levels of service provision for local activities in each local
board area; and
(c) the rates revenue and any other revenue
derived from each local board area in relation to local activities; and
(d) any other factor identified by the Auckland
Council as significantly affecting the nature and level of services needed in
each local board area (for example, the geographic isolation of a particular
local board area).
ii)
The proposed funding model does not
take into consideration the funding required to maintain and renew existing
assets, which risks the reputation of Auckland Council as public assets
deteriorate and become safety hazards.
iii)
The proposed funding model will have
a significant detrimental effect on the Kaipātiki Local Board’s
budget and prevent us from adequately fulfilling our legal obligations.
iv)
The proposed funding model is based
on the incorrect assumption that the current total funding level for local
boards is sufficient for boards to fulfil their obligations, when there is
documented evidence that both opex and capex are insufficient to meet current
demands.
v)
The proposed funding model does not
appear to be based on evidence, facts or research as to where the gaps in
services are for each Local Board area, but rather appears to be an
idealistic model that does not reflect the need of individual communities.
For example, some of the model examples provide the Kaipātiki Local
Board with additional opex when there has been no request for additional
opex, yet substantially reduces capex where current capex levels are below
that required to keep up with renewals, maintenance and assets required for
our growing population.
vi)
The fundamental principle of local
democracy is the relationship that communities feel between their provision
of rates (directly or via rent/lease) and the services, public assets and
amenity levels they aspire to. This sense of local ownership of local
amenities is critical to the function of local democracy and gives
accountability and legitimacy to Local Boards and territorial authorities for
their spending decisions.
As such, we believe that the proposed equity funding
model is contrary to achieving the purpose of local government under the
Local Government Act 2002 section 10 (1) (a), and the purpose of Local Boards
under the Local Government (Auckland
Council) Act 2009 section 10, and thus reject it outright:
10 Purpose
of local government
(1) The
purpose of local government is—
(a) to enable democratic local decision-making and action by,
and on behalf of, communities; and
(b) to promote the social, economic, environmental, and
cultural well-being of communities in the present and for the future.
10 Local
boards
A local board
must be established for each local board area for the purposes of—
(a) enabling
democratic decision making by, and on behalf of, communities within the local
board area; and
(b) better enabling the purpose of local government to be
given effect to within the local board area.
vii)
The proposed funding model shows a
decrease in funding for capital expenditure for the Kaipātiki Local
Board area which will result in a degeneration of our existing assets,
particularly as we are not currently funded to cover required capex renewals.
b)
offer the following further feedback
on the proposal to address local board funding inequity:
i)
We are very disappointed that the
proposal to redistribute existing local board funding is essentially pitting local
boards against each other in a ‘Hunger Games’ style process of
scrabbling over an inadequate amount of funding.
ii)
We believe as a matter of principle
that no local board should subsidise any other local board, with the
exception of Aotea/Great Barrier and Waiheke Local Boards.
iii)
We are also disappointed that the
term ‘equity’ has been used to drive a process that creates
friction, and therefore makes any genuine criticism of the proposal appear to
be wanting an ‘inequitable’ outcome, when that is not the case.
iv)
We question whether the New Zealand
Index of Deprivation (NZDep2018) has been used in the funding formula, as it
not only relies on the notoriously unreliable 2018 Census, but also
classifies sparsely-populated industrial areas as low deprivation, thereby
skewing the modelling.
v)
We request that the Governing Body
consider the fact that council is using assets built up by previous
generations within the Kaipātiki Local Board area to leverage debt to
build new assets in other local board areas, and that without continued
adequate investment in current assets, council’s borrowing capacity
will be impacted.
vi)
We suggest that local boards that
require new assets for new communities should implement a targeted rate (or
local rate) to pay for them. This is equivalent to what the established
communities within the Kaipātiki Local Board area have done over the
past few generations, and is more fair than the proposed equity funding
‘Robin Hood’ approach.
vii)
We do not support the exclusion of
growth funding from the proposed funding model, as it is a legitimate
investment of capex to create assets required by the growth of a population. Typically
the growth funding off-sets any ‘underfunding’ of capex, and the
assets built using growth funding will over time attract renewal capex.
viii)
We support the exclusion of funding
for discrete projects as:
A)
this funding is dedicated to a
particular purpose, and therefore excluded under the Local Government (Auckland Council) Act 2009
section 19 (3):
19 Local boards funding policy
The
local boards funding policy must also identify any funding (except funding dedicated
to particular purposes) that may be available to local boards for local
activities and the criteria or process by which it may be allocated to them.
B)
some of this funding is for our One
Local Initiative (OLI) which is a replacement for a demolished grandstand at
Birkenhead War Memorial Park that has been continuously delayed by the
Governing Body. The Birkenhead community has now been waiting for seven
years, while other Local Boards have received their OLI funding, including
Manurewa Local Board which had an almost identical grandstand project.
C)
some of the funding is for
implementing our Connection Network Plan which has not been able to be used
as the budget was pushed out by the Governing Body.
ix)
We support excluding the following
items from the scope:
A)
specific-purpose funds such as slips
remediation and coastal renewals
B)
targeted rate funding
C)
other local activities such as local
environmental management, local planning and development, and local
governance
D)
most unallocated budgets, with the
possible exception of some minor capex for response renewals and new
non-growth investment.
x)
We support more oversight and
flexibility for local boards to determine where rates funding is spent within
their communities.
xi)
We support local boards determining
whether funding is spent on capital or operational expenses rather than
keeping them separate.
xii)
We support other local board
receiving an increase in capex, but not at the expense of the Kaipātiki
Local Board’s funding. The Kaipātiki Local Board area was
underfunded in terms of asset maintenance and renewal under the previous
North Shore City Council, and at the time of amalgamation when asset renewals
were assessed, Kaipātiki assets ranked particularly poorly, and
therefore attracted a greater need for renewal funding. We have only just
begun to catch up on ensuring our assets are fit for purpose, with many still
in poor condition 13 years on from amalgamation. This has skewed the tables
into showing Kaipātiki as being ‘overfunded’ with capex.
xiii)
We support changes to local board
funding being aligned to any changes to boundaries and governance
representation that is currently under consideration.
c)
present the following alternative
fairer funding model to the Governing Body for consideration:
i)
As outlined above, not only do we
consider it essential that the rate take for each area is used as a factor in
calculating the local board funding model, it is a legal requirement.
ii)
When current Opex and Capex amounts
are added together, all local boards (except for Aotea/Great Barrier and
Waiheke Local Boards) receive from the Governing Body the equivalent total of
between 9% and 31.6% of the rate take from their respective areas. This means
that the Governing Body is keeping the equivalent of between 68.4% and 91% of
rates from each local board area for regional expenses.
iii)
We believe that this current funding
model should be reversed. Each local board should instead retain a fixed
amount of the local rate take, and pay a levy to the Governing Body to cover
regional expenses.
iv)
We propose that each local board
retains approximately 33% of rate take from their area. In that way, no local
board would be worse off than now, and all would have adequate funding to
provide services and assets for their area.
v)
If the Governing Body determines that
there is inequity between the amount that each local board is retaining, then
they can choose to top-up a Local
Board’s budget beyond the fixed amount from their allocation. We would
see this likely being the case for Aotea/Great Barrier and Waiheke Local
Boards.
vi)
The below table demonstrates the
amount of rates income that is currently collected from each Local Board area
(FY23), and the amount that each local board currently receives in Opex and
Capex combined, compared to how much each local board would receive if our
proposed funding model were adopted with each local board retaining 33 per
cent of rates:
vii)
We note that as the Waitematā
Local Board would receive a lot more than other local boards due to the City
Centre being located in its area, that this local board should be responsible
for funding CBD upgrades rather than being regionally funded as at present.
viii)
Further to this (and again in line
with legislation requiring that ‘other revenue derived from each local board
area in relation to local activities’ is a factor in the Local Board
Funding Model), we propose that all revenue collected in a Local Board area
(such as fees and charges) is returned to the local board as additional
budget (and not used to off-set budget as is the current practice).
d)
provide the following additional
feedback:
i)
We support the return of all
maintenance contracts to the oversight of local boards, as we believe local boards
can obtain a better level of service and value for money than Council
currently does.
ii)
Demand that local boards are provided
with monthly budgeted accounts as per good governance practices that many other
organisations adhere to.
iii)
We express concern at the spending
level of the Governing Body and suggest that more is done to reign this in so
that local boards have more funding to put back into their communities. In
particular, the Governing Body should look to stop selling assets and
disestablishing services that are returning profits to Auckland Council.
e)
request that this resolution is
circulated to the Mayor, the Governing Body, all local boards, and the Joint
Governance Working Group for their consideration.
CARRIED
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